Republicans More Resolved Than Ever to Pass Their “Fakakta” Tax Bill ASAP

Here’s the good news: on Tuesday night, the people of Alabama decided not to elect an alleged child molester who thinks that homosexuality should be illegal, that 9/11 was payback for Americans who stopped believing in God, and that the last time this country was great was when “we had slavery.” Here’s the less good news: with the election of an Alabama Democrat to the Senate for the first time since 1992, Republicans are more determined than ever to pass their train wreck of a tax bill as soon as humanly possible. On Wednesday, approximately 12 hours after Doug Jones handed Roy Moore,Donald Trump, and Steve Bannon a humiliating defeat, House and Senate Republicans announced that they’d reached an agreement, “in principle,” on a tax bill marrying elements of both versions, which they’re aiming to pass next week and have the president sign by Christmas as a “gift” to Americans. And their newfound sense of urgency means that legislation already “riddled with bugs, loopholes, and other potential problems” could become an even more of a haphazard joke, but one that’s less “ha-ha” and more “oops, there goes the economy.”

Some of these loopholes are, undoubtedly, viewed by Republicans as a feature rather than bugs; a little something extra in their wealthy corporate donors’ stockings, if you will. But others are clearly a result of the mistakes that will obviously come with attempting to write complex legislation at breakneck speed. “When Ronald Reagan signed a tax reform bill in 1986, it followed three years of detailed work, thinking through options and policies,” Austan Goolsbee, economics professor at the University of Chicago’s Booth School of Business and the former Chairman of the Council of Economic Advisers under Obama, told me. “It should be obvious to anyone that has ever filled out a tax form or written a check to the IRS that ham-handedly ramming a massive tax bill into law that has not been analyzed or debated is OBVIOUSLY going to make a lot of mistakes and create loopholes and giveaways. If there aren’t $100 billion of mistakes in it, I would be shocked.”

Perhaps the biggest indication that Republicans should—but won’t—pump the breaks on this thing? The fact that Anthony Scaramucci, who still sees himself as “an advocate for the president,” is saying publicly that the plan is crap. On Bloomberg TV this morning, the Mooch told the hosts that “it doesn’t seem like it was super well thought out in the beginning,” that “it’s far from perfect,” and that due to partisan politics “you’re getting this fakakta nonsense in the tax code.” As a reminder, Scaramucci has likened Jared Kushner to Alexander Hamilton, called the Russia investigation an “anti-Trump witch hunt,” and tweeted with the earnestness of an unpaid intern that Donny Jr. is a “virtuous and honorable man.”

That even the Mooch cannot be counted on to endorse this thing is obviously not a good sign, but at this point, Republicans obviously don’t care. They’re going to pass the bill if it’s the last thing they do, and if it turns out to be half as bad as expected, it might actually be the last thing many of them do in office. “Making your people vote on a bill that is extremely unpopular and is likely to be found out later to be full of things that smell terrible and which is likely to raise taxes on millions of middle-class families seems like a really strange thing to do when it was already shaping up to be a tough year for your party,” Goolsbee told me. “The [Republicans] who support this bill are going to have to defend every part of it, and they don’t even know what’s in it.”

Unsurprisingly, Democrats are demanding that a vote on the bill be delayed until Jones is sworn in. Senator Ron Wyden, the top Democrat on the Finance Committee, tweeted Wednesday morning, “Republicans and the administration must drop their partisan attempts to rush a corporate handout through Congress,” while Senator Chuck Schumer said “it would be wrong for Senate Republicans to jam through this tax bill without giving the newly elected senator from Alabama the opportunity to cast his vote,” citing the fact that in 2010, Democrats delayed a vote on Barack Obama’s health-care bill until Massachusetts Senator Scott Brown was sworn in. Democrats also mentioned the time Senator Mitch McConnell refused to allow even a hearing for Obama’s Supreme Court nominee, Merrick Garland, claiming that that particular decision should be made after the presidential election in order to “let the American people decide.” Republicans heard these arguments, considered them, and then basically responded, yeah, we don’t give a sht* about any of that.*

Were Republicans to play by their own rules and delay a vote until Doug Jones is seated, their already-slim Senate majority would shrink to 51-49. It’s not currently clear whether Senator Bob Corker is inclined to budge on his “no” vote, and there are question marks surrounding Marco Rubio,who wants a bigger child tax credit, and Susan Collins, who recently learned that you can’t always take people like McConnell at their word. (As others have pointed out, it’s also possible that Collins knew all along McConnell wouldn’t give her the concessions she wanted on Obamacare, and simply needed a reason to justify voting for the bill.) The Senate can still afford to lose two votes, as it can count on Vice President Mike Pence to ride in on horseback, as all Republicans apparently believe they are contractually obligated to do, and break a tie. But once Jones is sworn in, it’ll become that much harder to pass a wildly unpopular bill that could have hugely damaging effects. Republicans, apparently, are loath to let that kind of opportunity pass them by.

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One of the key principles upon which the Republican tax plan relies is the idea that cutting the corporate tax rate will ultimately benefit the middle class because companies will use their savings to invest, create jobs, and increase wages. There are a few problems with this claim, including 1) that studies show 70 percent of the benefits of a corporate tax cut go to those “at the top,” like C.E.O.s and shareholders, and 2) that many companies have said—in some instances to Gary Cohn’s crestfallen face—that they don’t plan to use the windfall on investments, jobs, and wages. On Wednesday, JPMorgan C.E.O. Jamie Dimon, who counts himself among the tax plan’s few fans, joined the fray, saying at the Axios Smarter Faster Revolution: “You need a competitive tax system . . . companies will retain more capital and start to use it over time. Some will raise wages. Some will buy companies. Some may do dividends and buybacks. Don’t act like that is a bad thing. That is their money. Think of it as a QE4. That money gets recirculated in the American system.”

Investing with Steve Cohen is a privilege, not a right

In less than three weeks, legendary hedge-fund manager Steve Cohen will be permitted to manage investor money again, when the ban he agreed to after his firm pleaded guilty to securities fraud expires. And if anyone thought they’d get a sweet deal just because he’s been out of the game since 2013, they thought wrong!

The terms being discussed for Cohen’s new fund—which he could launch as soon as Jan. 1, when his ban on trading outside money expires—include locking up capital for one to three years, according to people familiar with the matter. During that time, regardless of how the fund performs, clients won’t be able to withdraw their money without paying an additional fee, said the people, who asked to not be identified because the information isn’t public.

Cohen himself will get more flexible terms, two of the people said. It’s a juxtaposition some potential investors have called onerous, and it’s sparking concern over whether investing in the highly anticipated fund will be worth the liquidity risk...Jonathan Gasthalter, a spokesman for Cohen and Stamford Harbor, declined to comment.

In addition, the fund is expected to charge 2.75 percent in management fees and up to 30 percent on performance fees, rather than the industry standard of 2-and-20, which itself has come under attack as returns have lagged. In fairness, before Cohen charged 3-and-50 before he closed up shop to outside investors, so he probably sees these new terms as magnanimous.